Will The Dollar Survive?

Will the dollar survive? The Country–Now, The Future, and A Personal Strategy

Now: “Lagging Recognition” is James Howard Kunstler’s  (author of “The Long Emergency” and “World Made by Hand“) post today brought to us via lifeaftertheoilcrash.net. Mr. Kunstler is a noted author and commentator on current world, and especially U.S., conditions. His current post discusses some important aspects of our present condition and here is some of that discussion:

• “Here in the USA, we will mount the most strenuous campaign to keep the motoring system going — in fact, we’re already doing it — but it will fail just as surely as two (so far) of the “big three” automakers have failed. It will fail because car-making is only one facet of a larger network of systems that is coming undone, namely a revolving debt cheap energy economy.”
• “American’s will never again buy as many new cars as they were able to do before 2008 on the terms that were normal until then: installment loans. Our credit system is completely broken. It choked to death on securitized debt engineered by computer magic and business school hubris. That complex of frauds and swindles coincided with the background force of peak oil, which meant, among other things, that economic growth based on ever-increasing energy resources was over, and along with it ever-increasing credit. What it boils down to now is that we can’t service our debt at any level, personal, corporate, or government — and that translates into comprehensive societal bankruptcy.”
• “The efforts of our federal government to work around this now, to cover up the “non-performing” debt and to generate the new lending necessary to keep the old system going, is a tragic exercise in futility.”

The Future: From humanevents.com on 6/7/09 we read this headline, “Exclusive Interview with Future Prediction Expert Gerald Celente” by Terry Easton. And this sub-line, “It’s the end of the world as the Greater Depression hits after 2010’s failed “W – recovery”.

This interview with the head of Trends Report ( TRI, a company “… successfully predicting the major future trends impacting our lives for three decades.“) whose predictions are historically based combined with a following of “… over three hundred trends: family, crime, education, consumer and business patterns which TRI synthesizes to predict the future.” Here are some of Mr. Celente’s predictions:

• “Our society is now based on consumption — 70% of the GDP. This is more than we produce. So to pay our bills, we use funny money invented in 1913 with the creation of the Federal Reserve and the fiat dollar based on credit (debt) — the fractional reserve system. … Now you borrow what you can’t afford – and the nation’s doing the same.”
• “Mr. Celente predicts the use of printing press money will cause the “greater depression.”
• “The key to watch is Christmas sales. They’ll fall. Christmas will be when reality sets in.”
• The interviewer asks, “Will the dollar survive?” and Mr. Celente answers: “So, it’s not that the dollar will survive. We may not survive. Look at the German mess after WW1. …”

A Personal Strategy: “Fed giving ‘lip service’ to fiscal responsibility” says WorldNetDaily’s post headline (wnd.com) today. The article features some discussions with Dr, Martin Weiss, financial advisor (and analyst and president of Weiss Research))on the “… impact of out-of-control deficits”. Here’s his advice for “everyone”:

“Weiss recommends everyone “make severe sacrifices in order to save money and to build cash reserves for future bad times.”

The people who have been correct in their analysis of events in the past are now almost unanimous in their concerns for the future. PrudentHome.com believes that we as individuals and families should also be concerned and prepare.

We plan to discuss sustainability in the next few days and hope you will join us. Until then, keep your eyes on the horizon as the weathers changing fast.